All your life, you’ve worked hard to get to where you are today. You’ve built up a great career, you’ve been wise with your finances, and you’ve made smart purchases and investments that have paid off.
That’s why it’s so crucial that you don’t let all your hard work go to waste by failing to plan your estate ahead of time. By leveraging a few simple estate planning strategies, you can ensure that nothing happens to the wealth that you’ve spent your life building up.
Instead, you can make sure that you take care of the ones you love the most by getting your affairs in order. In this article, we’ll provide you with a few simple planning strategies to get you started doing exactly that.
The first thing to do is to take inventory of all of your estate. Your estate includes all of your assets. This includes everything from real estate properties to equity investments in the stock market to vehicles to the furniture in your home.
You don’t have to get super detailed, but you should have an overall idea of how much your net worth is by assigning values to each of your significant possessions.
Remember that your debts are also a part of your estate. Should you pass on before one or more of your debts are accounted for, these debts will be subtracted from your estate to pay your creditors before your beneficiaries see what you’ve passed on. Thus, it’s important that you either have a plan to pay off your debts or you do so ahead of time.
Set Guidelines for Medical Care
Estate planning isn’t only about your possessions. It also has to do with how you choose to be laid to rest. In the event that you are no longer capable of making decisions under medical care, medical staff will refer to your estate to see if you had any wishes as to what you want your health care directive to look like in your last days.
The next part of estate planning is the part that people are typically most familiar with: identifying beneficiaries and what they will receive in your estate.
Remember that you cannot simply designate beneficiaries in one document in your estate. Instead, if you have multiple retirement and insurance accounts spread across different providers, you may have to designate each of your beneficiaries in those systems.
Thus, it will be beneficial for you to keep track of all of the involved systems and the designated beneficiaries for each one in a master document. Update those designations as necessary.
Also, remember to name contingent beneficiaries. If your beneficiary passes on before you do, and you forget to name a contingent beneficiary, then that could result in legal disputes.
Set Up Trusts As Necessary
A trust is an interesting part of estate law. A trust can function in two different ways. Firstly, while you are still living and able to make decisions, a trust can designate certain portions of your estate to be given to certain causes.
For instance, you could set up a trust to donate a certain amount to a charity over the course of your lifetime. You could also change the beneficiary to be an individual.
A trust can also be set up in a way that even after your passing, the possessions of the trust are not passed on to an individual until a certain date. Let’s say that you set your grandkids as your beneficiary. However, you don’t want your grandkids to be able to spend or make any decisions regarding your estate until they are 25 years of age. The way you would set this legal structure up is with a trust.
Know Estate Tax Laws
As you plan your estate, it’s important for you to have a good handle on estate tax laws. As the famed author Mark Twain once said, “nothing in life is certain but death and taxes”. You can be sure that the government will cut a piece of the pie when your estate is being passed on to the next generation.
Knowing estate tax laws ahead of time will allow you to be able to structure your estate in a way that minimizes tax liability. You’ll also have a better idea of the actual amount of wealth that you will be passing on to your family.
Reassess Your Estate Planning Frequently
As your life changes, so may your plans for your estate. You may get divorced and remarry. To ensure that your current spouse gets your estate, not your ex-spouse, you’ll have to make those changes before you pass on.
You may also want to give certain amounts to charities that become more and more important to you as time goes on. All of those changes should be made as soon as you feel that way, or it may be too late. So take time to comprehensively assess your estate planning at least once per annum.
Get Professional Help
When it comes to estate planning, there’s no getting around the fact that it’s a complicated beast. If you want to make sure that you do everything correctly, then it’s advisable that you receive professional help from an estate attorney.
The right estate attorney will have a lot of experience in dealing with the disbursement of a person’s assets and will be able to make recommendations as to how to best structure your estate to reduce tax liability and increase your beneficiaries’ gain. There are many attorneys and firms out there, so be sure to shop around before you settle on a particular one.
Simple Estate Planning Strategies to Get You Started
There you have it — with these simple estate planning strategies in mind, you’re well on your way toward understanding how to ensure that your wealth is passed on to the people and organizations that you want to be benefited by your hard work. For more lifestyle advice, be sure to check out the rest of the articles on the website!